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• Ulrich Doraszelski
  University of Pennsylvania

We explore the sensitivity of the U.S. government’s ongoing incentive auction to multi-license ownership by broadcasters. We document significant broadcast TV license purchases by private equity firms prior to the auction and perform a prospective analysis of the effect of ownership concentration on auction outcomes. We find that multi-license holders are able to raise spectrum acquisition costs by 22% by strategically withholding some of their licenses to increase the price for their remaining licenses.  A proposed remedy reduces the distortion  in payouts to license holders by up to 80%, but lower participation  could greatly increase payouts and exacerbate strategic effects.